Aged care planning basics.
Aged care costs and the Age Pension interact more than most people expect. Here’s the plain-English version of what typically changes, and what’s worth checking early.
What usually changes when aged care enters the picture.
- Moving into residential aged care can change how the family home is assessed for the Age Pension, depending on whether a spouse or dependent still lives there.
- Aged care fees are means-tested separately from the Age Pension, using their own income and assets assessment — a lower Age Pension doesn’t automatically mean lower care fees, or vice versa.
- Refundable accommodation deposits (RAD) and daily accommodation payments (DAP) are different ways of paying the same accommodation cost, and the choice can affect both aged care fees and the Age Pension assets test.
- Home care packages for staying at home are assessed differently again, with their own contribution rules separate from residential care.
- Timing the move, and how the home and other assets are structured beforehand, usually has more impact on the outcome than any single decision made after moving in.
Aged care questions people often bring to Pension Pilot.
Does aged care affect my Age Pension?
It can. If a partner keeps living in the home, it’s usually still exempt from the Age Pension assets test. If no one stays there, the treatment can change — this is one of the more nuanced areas to check early.
Is RAD or DAP better for my situation?
Both pay for the same accommodation cost in different forms — a lump sum versus an ongoing daily payment. The right choice depends on cash flow, other assets, and how each option interacts with the Age Pension assets test.
Where should I start?
Get an Age Pension and asset position estimate first — it’s the foundation for every aged care fee calculation that follows, and it’s worth having before speaking with an aged care financial adviser.
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